Econ Unit 1 Test: Intro to Economics

What is scarcity in economics?

• The abundance of resources

• The unlimited availability of goods

• The limited availability of resources

• The balance of supply and demand

Opportunity cost is:

• The actual cost of a good or service

• The value of the next best alternative when a decision is made

• The price a consumer is willing to pay for a product

• The total cost of production

True or False: Scarcity is a fundamental concept in economics because resources are limited while human desires are unlimited.

• True

• False

True or False: An increase in the price of a product will typically lead to an increase in the demand for that product.

• True

• False

Scarcity occurs due to

• Limited resources

• Unlimited needs

• Abundance of resources

• Equilibrium

When demand is greater than supply, prices tend to

• Rise

• Fall

• Remain constant

• Fluctuate

Give an example of a situation where an individual or a company might face an opportunity cost.

Define "scarcity"

Match the following

• Opportunity Cost

• Penalties or costs that make people not want to do something.

• Trade-offs

• How much people are willing to pay for something based on supply and demand.

• Market Prices

• The study of how communities manage limited resources to meet all they want and need.

• Economics

• What you give up when you choose one thing over another.

• Negative Incentives

• When you choose one thing, you give up something else.

The difference between scarcity and lack is

• scarcity is a natural and recurring condition; lack is a man-made condition

• lack only occurs with new products

• lack is a natural and recurring condition; scarcity is a man-made condition

• lack is the fundamental and universal economic problem